There's nothing wrong with your son touching his privates at that age and by continuing to use a stern voice to say "no" you're giving him the impression that what he is doing is bad and shameful.
I'm sure he also has discovered his feet, his toes, his belly button, and other body parts and likely thought "hmmm, never noticed I had those before - let's check it out!" Chances are he has finally discovered his genitals and he realizes that when he touches them it feels good. He's not thinking, "wow this is such a sexual turn-on!", more like "Woah, this is an interesting feeling! I'm learning more about how my body works. Let's try it again."
Sounds 100% normal - so no need to make a big deal out of it.